Our TILS have
___ Variable Rate: Disclosures about the variable rate feature have been rpovided to you earlier.
For Variable Rate loans - we place a check mark place in front of this to indicate. Is this sufficient?

An OCC examiner is citing as a violation that the form does not state the fact that the transaction contains a variable rate feature.

Regualtory Cite:
If the annual percentage rate may increase after consummation in a transaction secured by the consumer’s principal dwelling with a term greater than one year, the following disclosures:

(i) The fact that the transaction contains a variable-rate feature.

(ii) A statement that variable-rate disclosures have been provided earlier

You may have a problem as they are referring to the model language:

H--4(B) VARIABLE-RATE MODEL CLAUSES

Your loan contains a variable-rate feature. Disclosures about the variable-rate feature have been provided to you earlier.

I think your only argument could be that checking next to

"Variable Rate: Disclosures about the variable rate....."

indicates that this loan has a variable rate, and the disclosures have been provided, meeting both requirements.

Unchecked mean not a variable rate, checked means variable rate. It is all you can say.

Our TILs disclose the following:

Variable Rate: My loan contains a variable-rate feature. Disclosures about the variable-rate feature have been provided to me earlier.

I'm with Randy in there is a potential disclosure problem. The wording, as stated above, does not state the loan contains a variable rate feature, is simply states a disclosure about a variable rate has been provided.

I agree in principle...I am just proposing the only argument they could try with the examiner - by checking the box, they are saying there is a variable rate feature. Unchecked, no variable rate feature. I would prefer it be more explicit, but if they want to try to avoid a violation, what I suggested is what I would say. I believe that is what was intended in the progamming.

Check - yes
No check - no

Kaybee

That is the response our vendor gave us also - If it is checked then the customer is aware it is variable.

I'm just glad that we do so well on compliance that a few technical wording issues is what we are cited for - just creates a problem with getting the vendor to update to suit the examiner.

This same examiner feels are ARM diclosure is not clear and conspicious because it it contains the disclosure for all arm programs with the applicable program checked off and completed.

Examiners don't run your bank, you do. If you don't agree with the examiner, see if you can negotiate this into the gray zone and off the "findings" list. If that doesn't work, challenge the finding at your exit conference. If that doesn't work, your exam report will contain your regulatory agency's official view of the matter, not just one examiner's opinion. Then, you will have a basis to make this interpretation your policy and you can notify the vendor accordingly.